Tag: Poland’s entry in the euro area
Announced by the European Central Bank, scheduled for September, targeted long term refinancing operations (TLTRO) will become one of important transmission mechanisms of monetary policy. The ECB hopes that they will restore the bank lending channel to the economy - said Yves Mersch, member of the Executive Board of the ECB.
The European Central Bank counteracts country-specific risk premia in eurozone, that hinders proper allocation of capital and incurs the risk of building up a new credit bubble. Meanwhile the eurozone is already waiting to cover huge write-off losses – said professor Hans Werner Sinn, president of Ifo Institute in Munich. Therefore, in the Polish debate about the entry into the eurozone he suggests – wait and see.
The European Union’s new member states from Central and Eastern Europe are required to join the eurozone as part of their accession agreements. But deciding when to adopt the euro is a matter of heated debate. It is not just an economic calculation, but a judgment on the outlook of the single currency itself. For many, the benefits of membership have diminished since the financial crisis, and prospective members, especially Poland, can derive maximum advantage from joining only if they are also clear on what economic conditions must first prevail in their own countries.
During the depths of the eurozone crisis just a few months ago, anyone suggesting that Poland ought to seriously start considering joining the euro would have been a candidate for a mental health check-up. But that is exactly what is happening, as Premier Donald Tusk and President Bronisław Komorowski kick off discussions on Poland's path to the common currency.
The discussion titled: “Poland’s competitiveness and economic growth” has launched a cycle of debates on opportunities and threats stemming from Poland’s entering the euro area, organized by the President of the Republic of Poland. The participants , who include officials responsible for the Polish economy in the former governments, have commonly indicated the same areas requiring urgent reforms: education, industrial policy, transport infrastructure, small enterprises sector, system of justice, cooperation between the state and the market. Below there are the most interesting opinions presented at the meeting.
The easing of the crisis suffered by the euro area for a few years reactivated the topic of our presence there. The awareness that without the euro adoption Poland would remain an insignificant EU player is increasing. The first dates of Poland's accession to the euro area are popping up, but these do not take into account the conditions we would have to meet to think about it at all. And before Poland’s EU accession becomes a fact, there are numerous preparations that are necessary.